Fiat is ready to restore its faded kingmaker role in Italian finance with the announcement of a plan to to buy a “major stake” in the Italian holding company Montedison, which has interests in the energy, telecoms, insurance, chemicals, engineering and shipbuilding sectors.
The board of Italy’s biggest conglomerate, Fiat, announced on Sunday it had approved a plan to buy a “major stake” in the Italian holding company Montedison.
It did not make clear if the planned bid was for a controlling stake of Montedison, which has interests in the energy, telecoms, insurance, chemicals, engineering and shipbuilding sectors.
But Montedison said later on Sunday it would sell several assets to reduce its debt in a move analysts said looked like a defensive measure aimed at fending off a takeover.
Italian and French newspapers had speculated that the emergency meeting of Fiat’s board on Sunday would result in the announcement of Fiat and France’s Electricite de France (EdF) joining forces in a 4,9-billion-euro (R33,8-billion) hostile takeover bid for Montedison.
Sidelined by one business defeat after another in recent years, the Fiat carmaking dynasty, controlled by Gianni Agnelli, is ready to try to restore its faded kingmaker role in Italian finance.
Montedison has for a decade symbolised the industrial clout of Italy’s largest merchant bank Mediobanca, which bailed out the agro-energy group when another industrial clan, the Ferruzzi family, saw its empire drown in debt in the 1990s.
And while Mediobanca has struggled to amass enough support from wealthy followers to see off the French invasion, the Agnellis see a now-or-never chance to expand industrially and recapture lost influence by taking a “major share” of the largest private group operating in Italy’s booming electricity market.
“The old guard are realigning themselves and Mediobanca is caught up in the middle. But the consequences could go much further than Montedison,” said an industry source.
Gianni Agnelli, the aristocratic patriarch of Italy’s most famous family, has a pile of scores to settle with Mediobanca. The bank had once bankrolled Fiat and was seen as the unofficial treasurer of the Agnellis’ business dynasty.
But the relationship turned sour in 1999 when the Agnellis found themselves on the losing side in a landmark takeover battle for Telecom Italia – ending their hopes of joining what at the time seemed an unstoppable telecoms boom.
Mediobanca led former typewriter maker Olivetti to victory in what was then the world’s largest hostile takeover. And the Agnellis, cold-shouldered by Rome, were forced to give up their role as core Telecom shareholder.
In the same year, the Agnellis saw their plans to orchestrate a takeover of Mediobanca shareholder Banca di Roma by Turin bank Sanpaolo IMI blocked. Meanwhile Fiat’s auto unit sank into losses for a while.
